Coco Palms rebirth still alive

WAILUA — The Utah private-equity company that has taken over the ruins of the former Coco Palms Resort in Wailua says it is moving ahead with plans to rebuild the property as a hotel and can meet an Aug. 31 county deadline to submit 26 different building permit applications.

At the same time, Stillwater Equity Partners, which took over Coco Palms after the Coco Palms Hui investment group defaulted on more than $22 million in financing, says it is working with the Kauai Police Department to control drug dealing and other illegal activity on the property that has thrived as the abandoned hotel sits vacant along Kuhio Highway.

These developments were described on Tuesday during an annual project update delivered by Stillwater to the Planning Commission, which could revoke Coco Palms zoning development rights if it does not meet the Aug. 31 deadline. That could essentially be the death knell of the long-touted effort by Coco Palms Hui and now Stillwater to rebuild and reopen the resort.

The update was delivered by Jon Pang, a lawyer representing Coco Palms, and Christian Zundel, Stillwater’s local representative heading the project. The Planning Commission also heard from Ron Agor, the architect who says he is redesigning Coco Palms as an updated, 350-room resort and rebuilding cottages on the property that were once the preferred accommodations of celebrities like Elvis Presley.

In March, Stillwater disclosed that Coco Palms Hui, founded by Oahu developers Tyler Greene and Chad Waters, had defaulted on more than $22 million in debt and was unable to proceed with its redevelopment plans. Stillwater stepped in and assumed control of Coco Palms Hui, but it had been unclear what the equity firm’s actual plan was.

Agor said that, as of Tuesday morning, 20 of the 26 required permit applications had been filed with the county. Neither Pang nor Zundel would identify any contractor who might be involved in actually building the resort.

Asked directly by a Planning Commission member if Stillwater actually has the financing to move forward with the project, Pang responded: “Yes, ma’am.”

Pang and Zundel said Stillwater has been in discussions with hotel operators who might take over the project or enter into management agreements. They declined to identify any such hotel corporation by name.

However, TGI has learned that there have been at least preliminary talks between Stillwater and Koa Kea Hotel &Resort in Poipu, which is part of the mainland-based Meritage Collection, an upscale hotel chain. It was not clear when such talks occurred or what their result was, nor is it known how many other resort-management corporations may have had discussions with Stillwater.

Both Jack Slim, Koa Kea’s general manager, and Giovanni Prada, its California-based marketing director, declined to comment on the report that Koa Kea has expressed interest in Coco Palms or to say what the resort company’s plans for the resort might be.

Pang and Zundel specifically declined to say whether Hyatt Hotels, which in 2014 announced a management agreement with Coco Palms Hui, was still involved in the project. Attempts to reach Hyatt were unsuccessful.

Zundel did not respond to a series of follow-up questions from TGI regarding any firm plans or specific potential partners Stillwater may have.

“We are prepared to take this project all the way to completion,” Zundel told the commission.

Moreover, said Pang, Stillwater is “fully aware of the conditions” that require all building permits to be submitted for county review by Aug. 31. Ka‘aina Hull, county planning director, said that if the permits are not in order by that date, Coco Palms could lose its zoning permit, which could potentially sink the project.

The zoning consideration is important because it would permit Coco Palms to rebuild on essentially the same footprint it had when Hurricane Iniki damaged the property in 1992. Despite the passage of time, Coco Palms remains largely grandfathered from updated building code requirements. It still must meet some modern standards relating to its location in the tsunami zone.

Should that zoning status be revoked, Coco Palms would have to start the process completely anew and meet standards that would apply as if the hotel was being built from scratch today. Such requirements could possibly make recreating Coco Palms infeasible.

Hull said that if Coco Palms misses the Aug. 31 deadline, the Planning Commission could still issue an extension of the deadline, but the mood at Tuesday’s meeting appeared to make clear that the five commission members, including the chair, Sean Mahoney, are disinclined to give Coco Palms more time past the August date.

Zundel said he is working with both the Kauai Police Department and Kauai Fire Department to get better control over the abandoned hotel.

“The drug use and criminal behavior has been a problem,” he said.

He said KPD has committed to paying closer attention to problems on the property. He and Pang said the fire department had expressed interest in burning down some structures that remain on the property for use in training exercises.

“We’re working to keep all squatters” off the property, Zundel said.

In responses to a query from TGI, KPD said: “In May of this year, in response to community concerns about possible illegal activity on the Coco Palms property, KPD reached out to the president of Stillwater Equity Partners, which is now managing the property. In June, KPD personnel met with Stillwater representatives at the Coco Palms site to discuss potential safety measures that might help to deter illegal activity, such as installing fencing, boulders and additional ‘No Trespassing’ signs.”

Pang said that Greene and Waters, the former heads of Coco Palms Hui, remain involved in the project and may have an equity interest. However, Waters and Greene are no longer involved in operations or planning for the construction, Pang said.

Coco Palms sits on 20 acres of prime oceanfront land that are effectively owned by Stillwater as a result of the default. The resort property also includes an additional 14.8 acres of land leased from the state Department of Land and Natural Resources.

A potential challenge for Stillwater could be that DLNR would have to approve any change in the identity of the lessee of the land — which would require a vote by the state Board of Land and Natural Resources.

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Allan Parachini is a Kilauea resident, journalist, furniture maker and retired public relations executive who writes occasionally for The Garden Island.